There are two kinds of debt. One kind borrows against the present. The other borrows against the future.
We go into debt to go to college or trade school, an investment in ourselves and our future earning power. We go into debt to buy a house with the hopes of providing a comforting, stable environment for our families.
We pay down debt with money, a transmutation of labor. We forgo the pleasures of what that labor produces. When we are debt-free, more of our labor goes towards enriching our present lives. Our sacrifices of time and effort for a better future are no different. We sacrifice short-term potential for the prospects of greater long-term potential.
For example, all the writing I do outside of work is an investment in my craft and my as yet unfulfilled career. Were it not for the future, and my responsibility for it, I would rather be doing a number of things single, 26 year-old men are known to do.
“Were it not for the future...” That is a strange way of putting it. The future is an inescapable fact of our temporal existence. We live in time. Everything we do and don’t do has consequences later. We owe our debt to the future itself. And it never fails to collect. Never. To pay it down, we borrow against the present. That’s the first kind of debt.
The second kind of debt is gratuitous. It satisfies impulsive, usually prurient desires, leaving a fading memory and more debt—money and otherwise—on top of the first.
Most of the debt we as a people accrue today is this second kind of debt. The American government is $16 trillion in debt and will borrow at least $1 trillion per year indefinitely. This is no less than a forsaking of the future for orgasmically indulging the present. I’m reminded of the rat in this parable from Michael Crichton’s The Terminal Man:
Olds found that there were areas in the brain where electrical stimulation produced intense pleasure—strips of brain tissue he called “rivers of reward.” If an electrode was placed in such an area, a rat would press a self-stimulation lever to receive a shock as often as five thousand times an hour. In its quest for pleasure, it would ignore food and water. It would stop pressing the lever only when it was prostrate with exhaustion.
Further, the Federal Reserve has kept the interest rate at near zero for 5 years running, decreasing the value of money to encourage people to spend it now, to enter into new debt now, disincentivizing sacrifices for long-term commitments. Insofar as it works, the prospects for the future wane. The future becomes a riskier investment.
To devalue money is to devalue labor that produces it, to devalue short-term sacrifices for long-term gains generally. A culture that extols the temporary over the transcendent is financially and morally bankrupt.